Here’s how ridiculous Congress has become: In order to avert the nation’s Highway Trust Fund from going broke, shutting down countless road projects and throwing 700,000 people out of work, the U.S. House approved a 10-month patch with money that may or may not exist.
The trust fund, which pays for highway and transit programs, is funded primarily by the 18.4 cents per gallon federal gas tax. The tax is not indexed to inflation and Congress has not raised it since 1993, during which time the U.S. dollar has lost 39 percent of its buying power.
Because Republicans in the U.S. House are adverse to any tax for any purpose - for fear of offending their wacky tea party base – Congress was unable to do the sensible thing and raise the gas tax.
Eventually, a gas tax must be transformed into a mileage-based system to account for higher-mileage, hybrid and all-electric vehicles. But, for now, it’s all we’ve got, so the right thing would have been for Congress to raise it over the next three to five years and index it to inflation.
That would have been too logical for this Congress. Instead the U.S. House passed a bill that funds highways and transit programs by allowing corporations to temporarily slow down their payments to pension plans. If enough corporations take advantage of this tinkering with pension plans, it will show up on their bottom lines and generate tax revenue.
But there’s no guarantee any corporations will play along. With business on an upswing, some corporations may take an opposite strategy and over-contribute to their pension funds, thus enjoying a tax deduction.
Those corporations that do slow down payments will have to speed them up later to meet minimum pension contribution levels, which the Congressional Budget Office has said could actually decrease federal tax revenues in the long-term.
Other money for the highway trust fund path will come from fees on importers and from robbing a separate fund designated to replace leaking underground storage tanks. We don’t know what any of this patch money has to do with transportation.
We could chide our U.S. representatives, but the U.S. Senate and President Obama are likely to go along with this specious scheme because nobody wants another “big issue” to blow up before the mid-term elections. They already have plenty of those on the table.
Nor is this the only Congress to avoid the prickly gas tax debate. The highway fund has been patched with other funding schemes 18 times since 2008.
Congress will eventually have to address how best to build and maintain transportation infrastructure, but it’s going to take strong bipartisan leadership that doesn’t now exist.